Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $1.1M (vs $1.7M modeled).
EBITDA Bridge — 7 RCM Levers
Each bar shows the annual EBITDA impact at full run-rate. Revenue levers increase top-line; cost levers reduce operating expense; cash acceleration releases working capital. Calibrated to published research bands (Denial 12%→5% = $8-15M on $400M NPR).
Lever Detail
Each value shows its data source. SELLER = seller data room, DEFAULT = model default, BENCHMARK = P75 peer benchmark.
| Lever | Current | Target | Revenue | Cost | EBITDA | WC | Ramp |
|---|---|---|---|---|---|---|---|
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $637K | $637K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $613K | $18K | $631K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $98K | $290K | $388K | $1.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $20K | $20K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 41.5% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
| CDI / Case Mix Index | 135.0% DEFAULT | 142.0% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
Implementation Timing Curve
Linear ramp to full run-rate per lever. Month 0 = close date. Partners should expect 60-70% of total uplift realized by month 12.
| Lever | M0 | M3 | M6 | M9 | M12 | M18 | M24 | M36 |
|---|---|---|---|---|---|---|---|---|
| Cost to Collect | $0 | $159K | $319K | $478K | $637K | $637K | $637K | $637K |
| Denial Rate Reduction | $0 | $158K | $315K | $473K | $631K | $631K | $631K | $631K |
| A/R Days Reduction | $0 | $129K | $258K | $388K | $388K | $388K | $388K | $388K |
| Clean Claim Rate | $0 | $10K | $20K | $20K | $20K | $20K | $20K | $20K |
| Cumulative | $0 | $456K | $913K | $1.4M | $1.7M | $1.7M | $1.7M | $1.7M |
Returns Sensitivity (IRR / MOIC)
5-year hold, 5.5x leverage, 3% organic growth, 10%/yr debt paydown. Green = exceeds 20% IRR hurdle. Amber = 15-20%. Red = below hurdle or loss. RCM uplift of $1.7M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 53% / 8.4x | 57% / 9.7x | 61% / 11.0x | 63% / 11.6x | 65% / 12.3x |
| 9.0x | 48% / 7.1x | 52% / 8.2x | 56% / 9.4x | 58% / 10.0x | 60% / 10.5x |
| 10.0x | 43% / 6.1x | 48% / 7.1x | 52% / 8.1x | 54% / 8.6x | 56% / 9.2x |
| 11.0x | 39% / 5.2x | 44% / 6.2x | 48% / 7.1x | 50% / 7.6x | 52% / 8.0x |
| 12.0x | 35% / 4.5x | 40% / 5.4x | 44% / 6.2x | 46% / 6.7x | 48% / 7.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 9% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.9x, adding 2.5 turns of cushion.
5-Year Value Creation Waterfall
EBITDA trajectory: 3% organic growth + RCM uplift ramp (full run-rate at month 18).
| Base EBITDA | RCM Uplift | Total | Margin | |
|---|---|---|---|---|
| Entry | $3.9M | — | $3.9M | 12.2% |
| Year 1 | $4.0M | +$1.1M | $5.1M | 16.1% |
| Year 2 | $4.1M | +$1.7M | $5.8M | 18.2% |
| Year 3 | $4.2M | +$1.7M | $5.9M | 18.6% |
| Year 4 | $4.4M | +$1.7M | $6.1M | 19.0% |
| Year 5 | $4.5M | +$1.7M | $6.2M | 19.4% |
Achievement Sensitivity
What if we only achieve a fraction of each lever? 50% = conservative, 75% = base management case, 100% = plan, 120% = stretch.
| Lever | 50% | 75% | 100% | 120% |
|---|---|---|---|---|
| Cost to Collect | $319K | $478K | $637K | $765K |
| Denial Rate Reductio | $315K | $473K | $631K | $757K |
| A/R Days Reduction | $194K | $291K | $388K | $465K |
| Clean Claim Rate | $10K | $15K | $20K | $24K |
| Total | $838K | $1.3M | $1.7M | $2.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 19 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 12.2% | -7.7% | 3.6% | 12.6% | P67 |
| Net-to-Gross | 49.5% | 25.8% | 33.5% | 41.5% | P78 |
| Occupancy | 62.9% | 51.3% | 65.3% | 83.7% | P42 |
| Rev/Bed | $277K | $421K | $922K | $1.4M | P17 |
| Exp/Bed | $243K | $415K | $837K | $1.3M | P5 |
Bridge Methodology
Coefficients calibrated to published research bands: denial 12%→5% = $8-15M on $400M NPR. Current metrics estimated from HCRIS public data and ML predictions. Target metrics set at P75 peer benchmarks with 60% gap closure assumption. Revenue levers use NPR × delta × avoidable share. Cost levers use claims volume × cost per reworked claim. Working capital from AR reduction is one-time cash (not included in recurring EBITDA). Returns assume 5.5x leverage, 3% organic growth, 10%/yr debt paydown.